Another attempt is being made to introduce a Bitcoin exchange-traded fund (ETF), but this time in a cautious manner. WisdomTree has filed for a commodity fund with 5 percent exposure to Bitcoins.
According to Tuesday’s filing with the Securities and Exchange Commission (SEC), the fund is eying to invest in energy, industrial metals, precious metals, and agriculture commodities, along with a 5 percent take into CME Group’s Bitcoin futures contracts.
“The Fund will invest in cash-settled Bitcoin futures traded on the Chicago Mercantile Exchange, which is a registered futures exchange, only,” the filing noted.
“The Fund will not invest in Bitcoin directly. Bitcoin is a digital asset (i.e., a cryptocurrency) whose ownership and behavior are determined by participants in an online, peer-to-peer network that connects computers that run publicly accessible, or “open source,” software that follows the rules and procedures governing the Bitcoin network.”
To date, multiple firms have approached the US SEC with their proposed Bitcoin ETFs, but the market regulator delayed or rejected every time showing some discrepancies. Notably, the watchdog never explicitly showed its disinterest in such digital asset-backed funds.
Bitwise, Wilshire Phoenix, Winklevoss twins – all tried multiple times to list a Bitcoin ETF on the US exchanges, but failed.
Though Bitcoin only made a small portion of the proposed WisdomTree Enhanced Commodity Strategy Fund, it can still make a major impact in the Bitcoin investment market.
Growing institutional demand in Bitcoin
Recently, institutions have started to take interest in Bitcoin and the impact is clearly visible in the futures market. The demand for CME Bitcoin futures and the open interest touched record highs for multiple consecutive days last month.
Meanwhile, the market demand for CME Bitcoin options is also skyrocketing recently as it now captures 20 percent of the total options market share, only following Deribit.